With the current economic climate, it’s a fact that most productions aren’t going to get the green light without careful consideration of the production budget. And states that offer the best incentives, along with support facilities and services, plus impressive crews, are getting a boost from filmmakers taking notice of how much money they can save. That’s changing the way the industry does business.
“The large incentives offered by states will absolutely play a part in where we shoot,” says director/writer/producer Mick Garris, who is in preproduction on the Stephen King feature film Bag of Bones. He goes on to share that Michigan and Massachusetts are among the places that are creating a favorable situation for filmmakers that are making an effort to provide help with budget concerns.
Tax credits and rebates are a major lure for tight-budgeted television movies. Von Zerneck-Sertner Productions have been prolific with their telefilms for networks and cable over the years, and have seen their dollars stretch by shooting in Canada, Australia, and other parts of the world. But now the U.S. is getting more competitive and that pleases producer Frank von Zerneck. He explains that although incentives initially drove him to Louisiana, “the crews and the ever-expanding production facilities have kept us coming back.”
That’s how the system works nowadays, according to veteran producer/writer Michael Sloan. As more filmmakers embrace certain states, they start to create production centers that encourage local talent, which expands the crew base and infrastructure. But arguably, it’s the incentives that fuel that engine. And here’s the latest list, in no particular order, of locations that are going full steam ahead with their enticing offers, which have already seen major productions come on board, bolstering the economy of the film-friendly states.
The big news this summer is that after two seasons of filming in Hollywood, ABC’s Ugly Betty series is headed to New York, thanks to the lure of the Empire State Film Production Credit program. The newly increased refundable film production tax credit of 30 percent will greatly help with the series’ budget, which is reported at $3 million per episode. And Betty has another pretty incentive to move to Manhattan. The Made in New York Incentive Program provides an additional 5 percent tax credit for qualified productions shot in New York City. Other NYC benefits include free permits in all five boroughs and no charge for police. And making it even easier is the concierge service offered, providing help with budget analysis, scouting, story development, and discounts from hotels, car rentals, and other vendors.
In addition to the state’s refundable 30 percent tax credit on in-state, below-the-line costs ─ that are up from 10 percent ─ there is an investment tax credit for qualified production facilities. The criterion is that the feature films, episodic shows, pilots, etc., do the majority of their filming, spending 75 percent or more, at qualified facilities in the state. According to Pat Kaufman of the New York State Governor’s Office, productions that might have shot in Louisiana or Toronto are coming back to New York.
Long ago, New York learned that being a film-friendly state reaps many financial benefits. When Law & Order set up shop in the Big Apple in 1990, producer Dick Wolf admits that filming around Manhattan with the unions, traffic, permits problems, etc., was a little bumpy early on. But working with the film office paved the way for smoother shoots. As the efforts to increase tax incentives grew, so did Wolf’s love for New York, reminding us that “The city is a main character in all of the Law & Order shows.”
Recent productions include: Ugly Betty and Life on Mars for ABC, Fox’s Fringe, NBC’s Kings, plus many features around the state.
Connecticut has experienced a 1/2 billion dollars worth of production expenditures since the July 2006 inception of the state’s 30 percent Digital Media and Motion Picture Tax Credit Program. That is a transferable tax credit given to qualified production expenses ─ including labor ─ spent in the state. No minimum filming days are set, but a minimum spend of $50,000 is a requirement.
“To further continue our commitment to the industry, we now have three tax credit programs that include production, infrastructure, and digital animation,” according to Ellen Woolf of the Connecticut Commission on Culture & Tourism Film Division in Hartford.
Accompanying the marked rise in production is a successful and ongoing expansion, with regard to infrastructure, crew base, and production services. Raven-Symone` helped produce and starred in College Road Trip, filmed in Connecticut and was pleased with the tremendous support offered by the state, as well as “the many looks we needed to film a cross-country trip.”
Recent productions include: Confessions of a Shopaholic, The Vicious Kind, The Private Lives of Pippa Lee, Farlanders, 25/8, Everybody’s Fine, All Good Things, and Once More With Feeling. Website: www.ctfilm.com
If filmmakers shoot more than half of their movie or spend more than half of the production budget in Massachusetts, the state offers an income tax credit equal to 25 percent of the total in-state spend. Filmmakers can receive the credit as a direct rebate equal to 90 percent of the face value ─ guaranteed by the state. Cast and crew from out of state qualify and there is no statewide talent or production cap. Plus, qualified filmmakers can get a 100 percent sales tax exemption on any production-related items purchased in the state. Keep in mind that production insurance, workers compensation, and completion bonds are not qualified expenses.
In just a short period of time ─ since 2006 ─ the economic impact of the film tax credit in Massachusetts has been impressive. “The state recently improved the package of incentives dramatically,” reports Nick Paleologos, executive director of the Massachusetts Film Office. “And you can see since last July, there have been 15 major productions shot in Massachusetts in just 12 months. They came here for the financial situation and they spent a ton of money here.”
It’s a win-win situation for everyone, not just for big-budget Hollywood productions. The minimum spend is $50,000 and “digital media projects” can qualify. And it’s nice to hear that the Commonwealth is sharing the wealth, extending the benefits of the film tax credit to locally-based, independent and documentary filmmakers. That’s a big plus to grow Massachusetts’ strong crew base, which is already able to support numerous productions.
Recent productions include: Ghosts of Girlfriends Past, Paul Blart: Mall Cop, Shutter Island, The Proposal, The Surrogates, This Side of the Truth, and Bride Wars.
Southern hospitality, along with Louisiana’s 25 percent transferable income tax credits, have productions flocking to the state, which helped start the growing trend in offering incentives. The 25 percent tax credit is for expenditures from Louisiana vendors. Labor costs qualify and an additional 10 percent employment credit is offered on the portion of the payroll for in-state residents. Plus, there’s a state infrastructure tax credit of 40 percent for qualifying investments. That has helped the overall production industry make giant leaps forward.
Filmmakers are praising the Louisiana infrastructure, increasingly growing deep crew base, and the diverse locales throughout the state. Brad Pitt recently shot The Curious Case of Benjamin Button in New Orleans ─ as well as Jefferson Parish ─ thanks to the studio facilities that service southeast Louisiana. Sean Penn also knows the Jeff Parish area, since he did All the Kings Men, praising the shoot as “a pleasant experience.”
Along with New Orleans and Jefferson Parish, Baton Rouge, Shreveport, Southwest and Northeast Louisiana ─ among other areas ─ have friendly and helpful film commissioners who assist the many productions traversing the state. Baton Rouge Film Commission’s Amy Mitchell-Smith says that old fashion, southern hospitality and the diversity of locations keeps filmmakers coming back to the state. “And with the steady flow of productions ─ thanks to the incentive programs ─ our crew base is very strong. Plus, we now have the Celtic Media Center, a full service studio complex.”
Shreveport has the StageWorks of Louisiana, and the Louisiana Wave Studio, among its assets. The Robert E. Nims Center for Entertainment Arts complex is at the University of New Orleans, adding to the state’s infrastructure. This summer, New Orleans boasts that eight major film projects will shoot, with ample A-crews for all.
big help to filmmakers is Louisiana Economic Development’s (LED) high-tech “FastLane” service, which provides online submittal and tracking of applications for two of the state’s most popular business incentives. LED is the first state economic development department to offer online electronic processing for the entire incentive application process.
Recent productions include: I Love You Phillip Morris, Cirque du Freak, 12 Rounds, Billy the Exterminator, Cadillac Records, Drones, and Lightning Strikes.
Websites: www.lafilm.org, www.neworleansgateway.com, www.neworleansfilmoffice.com, www.filmbatonroughe.com,
Bragging about their “painless 25 percent tax rebate, with no cap and no minimum spend requirement,” has paid off handsomely, according to deputy director of the New Mexico Film Office, Jennifer Schwalenberg. With a couple more months to go in the fiscal year, New Mexico’s revenue from productions hit $471.6 million, versus the $467 million for the entire 2007 fiscal year. Plus, there’s a film investment loan program with 0 percent interest ─ up to $15 million. Add to that, the state’s Film Crew Advancement Program, offering 50 percent wage reimbursement for on-the-job training of New Mexico residents in advance below-the-line positions, and it’s clear to see why the state is one of the fastest growing production communities.
The incentives have helped develop “an exceptional and extensive crew base ─ the largest between coasts ─ with 1800 members and dozens of dedicated industry vendors,” Schwalenberg reports.
The state also offers one of the most successful U.S. incentive programs for studio and independent projects. The new Albuquerque Studios has been active and offer several new sound stages. And the film office offers a searchable location database on its website. New Mexico, a union state, is less than a two-hour flight from Los Angeles, has a temperate climate with over 300 days of sunshine, and varied sites ─ from snow-capped mountains to deserts ─ adding to its lure. Also, there’s the state’s Green Filmmaking Initiative, offering help and advice on environmental projects.
Producer Paul Stupin, for the USA Channel series In Plain Sight, says going to Albuquerque was a great move, because the state’s landscape has “its own unique quirkiness that fits the show; it’s a spectacular place to film.
Recent productions include: Crash, Lifetime’s Sex & Lies in Sin City, and feature films Run for Her Life, Observe and Report, Easier with Practice, Legion, and Terminator Salvation: the Future Begins, directed by McG.
Arizona’s Motion Picture Tax Incentive Program (MOPIC) has been a key reason for major productions filming in the state. A qualified company may receive income tax credits equal to 20 or 30 percent of the company’s investment in eligible Arizona production costs. And since the MOPIC program was enacted in 2006, over 140 applications with more than 50 qualified pre-approvals that have started their productions.
Changes to the MOPIC program in Arizona have added new incentives in 2008, such as the “Commercial and Music Video” set-aside of five percent of the annual allocation, and a new “Infrastructure Transferable Tax Incentive” for studio facilities specifically for the film and television industry.
The Arizona MOPIC program is fluid in that pre-approvals for qualified productions can enter the program and if for some reason, are unable to complete their obligations, the pre-approval credits are withdrawn and placed back into the program for that calendar year.
Last year, producer/director Peter Berg turned the Arizona desert into Saudi Arabia for Universal Pictures’ The Kingdom, and called it a great experience with the incentives and support from the film office.
Before lensing Stephen King’s Desperation for ABC/Circle Films, producer/director Mick Garris says his producing partner, Mark Sennet, “met with Arizona government officials and helped shape the favorable situations for filmmakers there. We had a great experience in Tucson and Bisbee [with] great locations, enthusiastic cast and crew, and open arms from both the governmental forces and the citizens, which makes a huge difference.”
Director of the Arizona Film Office Harry Tate explains that the, “film and television industry has long recognized the vast array of locales and beautiful scenery Arizona has to offer. We've added to our scenic attributes with financial incentives that offer budgetary reasons to consider filming in Arizona. We continue to attract attention from many international countries whose filmmakers and television producers have found the look, the cooperation, and the experience they were seeking in Arizona.”
Recent productions included: Kids in America (2008), Lionsgate’s series, Hidden Palms (2007), and a Sony/Spike TV pilot called, SIS. There was an independent feature from the Ronalds Brothers (Netherbeast Incorporated) called The Graves and Jolene, Into The Wild, Jake's Corner, and Longshot. Website: www.azcommerce.com/film
The Pennsylvania film incentive is a 25 percent transferable tax credit for film and television projects. There’s a maximum of $75 million available per year, and 60 percent must be spent for qualified Pennsylvania expenses. Goods and services for the production qualify if purchased from state vendors. If the expense is subject to state taxes, it qualifies. Production insurance completion bond and workers compensation qualify, if purchased from a Pennsylvania vendor.
Productions can utilize state-owned locations at no charge, except for costs incurred by the affected department or agency, but permits are required to shoot on the majority of state property. Completed films must acknowledge the Pennsylvania Film Office in final credits and display the state’s logo. The state also offers a 20 percent grant program. There’s a large crew base, along with support services in the two main urban centers located in Philadelphia and Pittsburgh. And the infrastructure is growing with plans for developers to build two movie studios in Delaware County and Montgomery County ─ due to a great tax credit benefit.
Thanks to a big push by Sharon Pinkenson of the Greater Philadelphia Film Office, the local IATSE union reports that more than $500 million in projects are underway or planned for the next three years.
Recent productions include: The Dream of the Romans, Marley & Me, Happy Tears, The Last Airbander, Transformers 2; series Cold Case, and It’s Always Sunny in Philadelphia.
Florida enjoys a great reputation among filmmakers, who have praised their crews, locations, talent pool, and weather throughout the Sunshine State. Adding to its appeal, a cash rebate is being offered of up to 22 percent on qualified production expenditures. To get to that 22 percent, you have the general rebate of 15 percent, along with another 5 percent, if three-quarters of your filming takes place during the off-season of June 1 to November 30, and if you’re producing a family-friendly film, you can add on a 2 percent bonus. There is a maximum rebate of $8 million for feature films and television productions.
The film office’s Discounts and Deals program lists special deals and discounts from vendors around the state. And Florida offers a sales tax exemption on qualified production purchases, making for an even greater budget-saving experience.
Florida is not only the place for incentives and grants, but just about every corner of the state celebrates the industry with dozens of film festivals. One of the most successful is the Palm Beach International Film Festival, which has created an opportunity to introduce filmmakers to the area’s resources. Showcasing student films also encourages homegrown talent, and that’s one of the goals of the Central Florida Film Festival (August 29 - 31), when they send out a call for entries. It all goes to reinforce Florida’s thick and seasoned infrastructure, most evident in the Miami and Orlando areas, and spreading throughout the state to support multiple shoots.
Recent productions include: Hurricane Season, Confessions of a Shopaholic, I Love You Phillip Morris, Marley & Me, December, Thespians, Zobotomy; and series: Burn Notice, Police Beat, Redneck Weddings.
“The Film Tax Credit put Illinois back on the film industry’s map and helped Illinois achieve record revenues of $155 million for 2007. I am pleased to bring together two generations of local filmmakers for this event today to highlight Illinois’ deep talent pool,” announced Governor Rod R. Blagojevich ─ flanked by actor/writer/producer/director Harold Ramis (Ghostbusters) and producer John W. Bosher (Chicago Overcoat, filmed entirely in Chicago). “By renewing the tax credit, we’re holding on to our competitive position and ensuring that filmmakers will continue coming here to make their movies,” Governor Blagojevich added.
In 2000, Illinois began suffering a mass exodus of film industry as other states began enacting film incentives. By 2003, the Illinois film industry had fallen to an all-time low of $23 million. In response, Governor Blagojevich enacted the Illinois Film Tax Credit. Since its passage, the film industry has rebounded dramatically. The film industry reached an all-time record in 2007. This represents the single best year in the state’s history, and an 80 percent increase over 2006. According to Ashley Cross of the Illinois Film Office, the Illinois Film Tax Credit has done a tremendous job bringing revenue and creating jobs in the state, by offering a 20 percent tax credit to filmmakers for money spent for Illinois goods and services. This includes wages paid to Illinois residents.
Recent productions include: Public Enemy, the Informant, Baby On Board, The Unborn, and the Dark Knight.
Currently grabbing the spotlight for offering the gigantic incentive of 40 percent is the state of Michigan. “That makes Michigan very attractive. It will be something that many will have to consider, and I think the people who spearheaded the legislation will see it become a huge success,” says producer Frank von Zerneck.
The most generous package of incentives includes 40 percent of a refundable and transferable business tax credit or a non-refundable, non-transferable income tax credit. There is a maximum benefit of 40 percent of direct production expenditures in some locations, and 42 percent of qualifying direct production expenditures in “core communities.” And 30 percent of qualified personnel expenditures or a 50 percent qualified job training expenditure credit for resident below-the-line crew.
The state offers a sizable crew base and the Michigan Film Office has an online production guide to assists filmmakers with every type of assistance ─ before and during a shoot. And let’s give Michigan credit for the “48 Hour Film Project” stunt, which has filmmakers from all over the Detroit area competing to see who can make the best short film in only 48 hours during the weekend of July 18…pity the poor PAs!
Recent productions include: The Saint, Right Angle, Youth in Revolt, and the pilot The Prince of Motor City.
International Film Guarantors (IFG), a subsidiary of Fireman’s Fund Insurance Company, notes that in the past couple of years there has been a marked increase in completion guarantees in such states as New Mexico and Michigan ─ both of which offer large tax credits. Ironically, guarantees also go on in California, which does not offer such credits or benefits.
A spokesperson for the Santa Monica-based company, says a weak American dollar and the tax incentives have been the major factor in the business structure. In the past year, IFG has written completion bonds totaling more than $1 billion for films of all budget sizes, and even the IFG fee may be part of the qualified spend, where permitted. Website: www.IFGbonds.com